The average Australian tax return is set to rise this year to around $2600, driven by things like the extended Lower Middle Income Tax Offset, and a sustained working-from-home environment that’s expected to increase the amount of deductions claimed.
But what will Australian’s do with this extra money?
Most people are playing it safe.
It’s commonly assumed that most people will go out and spend this bumper tax return on a fancy dinner and a big flat-screen TV. Let’s be honest – it can be hard to resist the temptation that a big cash injection can offer you.
However, a recent survey undertaken by Finder, a popular data analysis company, has shown that most Australian’s are more responsible than you might think.
35% of Aussies – around 6.8 million people – are planning to put their entire tax return into savings, making it the most popular choice by far.
It’s particularly popular amongst Gen Z, almost half of whom are planning to save their return. This is compared to only 23% of baby boomers, putting another nail in the coffin for the ‘smashed avo’ myth that suggests young Australians can’t control their spending habits.
Those planning to save aren’t the only ones with their priorities in order. 12% of Australian’s say they will use the extra funds to pay for household bills, and 7% will put it towards paying off their mortgage.
One likely reason for this careful behaviour could be that the events of COVID-19 have shown Australians how an unexpected financial event could come out of nowhere – and it’s better to be prepared with some savings in the bank.
Some Australians could miss out. You need to be prepared.
Surprisingly, given that it’s likely to be a better year than usual, a whopping 30% of Australians responded that they didn’t believe they would get any money back in their return this year.
This has sparked concerns that many people may be unaware of available tax cuts like the LMITO (Lower Middle Income Tax Offset), or that they don’t realise that they can reduce their tax legally through deductions. These people are seriously at risk of missing out on this year’s big windfall.
For an affordable fixed price, an expert tax professional will review your tax return before it’s sent to the ATO to make sure you haven’t missed any opportunities to save. In fact, EzyTaxBack guarantees a maximum return.
We won’t judge you if you buy that TV, by the way. Just make sure you don’t miss out!
Disclaimer: This advice is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether this advice is suitable for you and your personal circumstances before acting.